In order to improve budget unity and
flexibility it is advisable for government to: (i)
reclassify program loans as an ‘on-budget’
financing source so that these resources
can be used flexibly to finance budgetary
expenditures within the budget process
rather than be tied to individual projects as an
‘off-budget’ source. This measure will improve
efficiency and effectiveness of budget spending;
and (ii) other than in a situation of emergency, in
case financing is needed in excess of the ceiling
allowed under the PDM Act, then it would be
advisable to legislate a change in the ceiling,
rather than proceed through the off-budget
window. Again such a move will preserve
the unity of the budget while reducing the
additional workload on the Ministry of Finance
on managing and reporting on these funds.